8-KMaterial AgreementsFinancial EventsExhibits & Filings

STRYKER CORP 8-K Report, Material Agreement (Nov 23, 2005)

Filed November 23, 2005For Securities:SYK

Summary

This 8-K filing by Stryker Corporation announces the entry into a new, significant credit agreement on November 18, 2005. The "New Credit Agreement" establishes two primary facilities: a senior term loan facility for its indirect wholly-owned subsidiary, Howmedica International S. de R.L., amounting to €190,000,000, and a senior revolving credit facility for Stryker and certain subsidiaries, with a maximum amount of U.S.$1,000,000,000. Both facilities have a maturity date of November 18, 2010. This development also includes the termination of Stryker's prior credit facility from December 21, 2001. The proceeds from the new facilities are intended for general corporate purposes (revolving credit) and to fund a repatriation dividend (term loan). The agreement includes standard covenants, representations, warranties, and events of default, reflecting typical terms for corporate borrowing. Investors should note the significant increase in available revolving credit capacity compared to the previous facility, suggesting potential for future investments, acquisitions, or share repurchases. The use of proceeds for a repatriation dividend indicates a potential return of capital to the parent company or a strategic move related to international operations. The new credit terms, including interest rates and fees, are tied to Stryker's credit rating, providing an incentive for maintaining financial health.

Key Highlights

  • 1Stryker entered into a new Credit Agreement on November 18, 2005, replacing its prior facility.
  • 2The new agreement includes a €190 million senior term loan facility for subsidiary Howmedica International.
  • 3A senior revolving credit facility of up to U.S.$1 billion is available to Stryker and its subsidiaries.
  • 4Both the term loan and revolving credit facilities mature on November 18, 2010.
  • 5The term loan proceeds are intended to fund a repatriation dividend.
  • 6The revolving credit facility proceeds will be used for general corporate purposes.
  • 7The agreement includes customary covenants, representations, warranties, and events of default, with implications for financial reporting and leverage ratios.

Frequently Asked Questions

The primary purpose of this 8-K filing is to announce Stryker Corporation's entry into a new, material definitive agreement: a Credit Agreement executed on November 18, 2005. This agreement establishes new borrowing facilities and also signifies the termination of their previous credit agreement.

The new Credit Agreement consists of two main parts: a senior term loan facility of €190,000,000 for its subsidiary Howmedica International, and a senior revolving credit facility of up to U.S.$1,000,000,000 for Stryker and certain subsidiaries. Both facilities have a maturity date of November 18, 2010.

The proceeds from the senior term loan facility are designated for Howmedica International to meet short-term borrowing needs in connection with a repatriation dividend. The proceeds from the revolving credit facility are intended for Stryker's general corporate purposes.

The termination of the Prior Credit Facility, established in December 2001, indicates that Stryker has moved to a new, potentially more advantageous or suitably structured, financing arrangement. It also means all letters of credit previously issued under the old facility have been terminated.